Bryan Caplan and David Henderson

Arnold Kling: June 2012

An Author Archive by Month (26 entries)

The Drop in Home Equity

Macroeconomics
Arnold Kling
Timothy Taylor has written one of his bests posts. He writes, Through much of the 1990s, the ratio of owner's equity to GDP fell, but in the early 1990s, that was partly a result of depressed regional real estate markets... MORE

Opening Minds, Closing Minds

Politics and Economics
Arnold Kling
The following thought occurred to me recently. Suppose we look at writing on issues where people tend to hold strong opinions that fit with their ideology. Such writing can (a) attempt to open the minds of people on the opposite... MORE

Jonathan Rauch is Uncharitable

Economics of Health Care
Arnold Kling
He writes, According to conservatives, the government should not make people buy insurance; it certainly should not provide coverage for them. That would seem to eliminate the two main ways to deal with free riders. One obvious possibility remains. If... MORE

PSST: Work-Sharing May Not Work

Macroeconomics
Arnold Kling
Don Peck writes, Today, American companies facing weak demand typically lay off workers, even though that decision can be costly down the road (rehiring and training are expensive). A work-sharing program would allow companies to instead make temporary, across-the-board reductions... MORE

Changing World Trade Patterns

International Trade
Arnold Kling
From the latest issue of the Journal of Economic Perspectives, I recommend The Rise of Middle Kingdoms by Gordon H. Hanson. Whereas high-income economies accounted for four-fifths of global trade in 1985, they will account for less than half by... MORE

Eurozone Crisis: what is the solution?

Eurozone crisis
Arnold Kling
Friends sometimes ask me this question. My answer is rather harsh. The problem is that some governments and some banks are insolvent. When a financial institution is insolvent, its liabilities must be taken over by a solvent institution. The solvent... MORE

Priceless Economics

Labor Mobility, Immigration, Outsourcing
Arnold Kling
A McKinsey Report says, Based on current trends in population, education, and labor demand, the report projects that by 2020 the global economy could face the following hurdles: 38 million to 40 million fewer workers with tertiary education (college or... MORE

The Case for a Strong Government Auditor

Business Economics
Arnold Kling
In an essay, I write, An independent auditor has some obvious potential problems. On the one hand, it could be ineffectual if it turns out to be weak relative to the independent agencies, or captured by them. On the other... MORE

I Come Cheap

Books: Reviews and Suggested Readings
Arnold Kling
1. via 99-cent e-book: Not What They Had in Mind. I am still proud of this analysis of the financial crisis. Of course, if you want to get it even cheaper, you can download it from SSRN. 2. as part... MORE

James Manzi on Stargazing

Economic Methods
Arnold Kling
In a podcast with Russ Roberts, Manzi says, Is the number of stars in our galaxy odd or even? Well, there's a real answer to that question. If you have a bunch of people yelling odd and a bunch of... MORE

Tyler Cowen's Column, Again

Politics and Economics
Arnold Kling
Cowen writes, Ezra responds to my column of Sunday with this post. He also can point to Catherine Rampell and Bryce Covert. In a comment on my post, Cowen wrote, I definitely agree we are spending and borrowing too much... MORE

Deirdre McCloskey Throws Down the Gauntlet

Political Economy
Arnold Kling
She writes, The master narrative of High Liberalism is mistaken factually. Externalities do not imply that a government can do better. Publicity does better than inspectors in restraining the alleged desire of businesspeople to poison their customers. Efficiency is not... MORE

Sentence to Ponder

Business Economics
Arnold Kling
From Tyler Cowen: If your blogging or writing doesn't increase the degree of trust among people who do not agree with each other, probably you are lowering the chance for better policy, not increasing it, no matter what you perceive... MORE

Tyler Cowen writes for the NY Times

Politics and Economics
Arnold Kling
His latest column ends, The reason that we aren't getting more expansionary macro policy is fundamental: a lack of trust. It's not an easy problem to fix, but the place to start is by recognizing it. Two possibilities. 1. He... MORE

Perspective on the Eurozone Crisis

Eurozone crisis
Arnold Kling
John Cochrane writes, The euro was explicitly set up as a currency union without a fiscal union. (And it turned in to one without a bank regulatory union.) That can work, a fact which practically all commentators ignore. The central... MORE

The Sector with the Sticky-Wage Problem

Labor Market
Arnold Kling
As Josh Barro points out, it is the public sector. San Jose spends $142,000 per FTE on wages and benefits, up 85 percent from 10 years ago. As a result, the city shed 28 percent of its workforce over that... MORE

Executive Nullification

Politics and Economics
Arnold Kling
Bryan writes, Obama's semi-amnesty for hundreds of thousands of illegal immigrants sounds like the best U.S. political news of the 21st-century. I am less certain. Even if you want open borders, I am not sure that this is how you... MORE

Exit and Voice in the Workplace

Political Economy
Arnold Kling
Elizabeth Anderson writes, I'm arguing that the case for workplace democracy and other democratic constraints on employers is the same as the case for democracy anywhere: it's better for securing the freedom and personal independence of the governed than the... MORE

Awaiting Comments from Scott Sumner

Monetary Policy
Arnold Kling
Two papers on Milton Friedman's monetarism (both in the same pdf), one from Jerry Jordan and one from Allan Meltzer. They come from a 2010 symposium sponsored by the LIberty Fund and the Pacific Research Institute, and they are reproduced... MORE

The Big Gulp Ban

Politics and Economics
Arnold Kling
Will Wilkinson writes, I've often suspected that paternalists like Mr Noah generally cares more about sending "a powerful message of social disapproval" than about the actual effects of paternalistic policy on welfare. It's worth remembering that liberalism is, at its... MORE

College and Class Identity

Economics of Education
Arnold Kling
Noah Smith writes, College is an intense incubator where smart people meet other smart people. The large number of leisure activities and the close quarters in which people live facilitate the formation of friendships and romantic relationships, while the exclusiveness... MORE

You Come to Resemble Your Customers

Business Economics
Arnold Kling
Tyler Cowen quotes from a wide-ranging essay by David Graeber. The growth of administrative work [in universities] has directly resulted from introducing corporate management techniques. Invariably, these are justified as ways of increasing efficiency and introducing competition at every level.... MORE

The Bankers' View

Eurozone crisis
Arnold Kling
Robert RubinRoger Altman writes, How can Europe pull back from this brink? It needs to immediately install a series of emergency financial tools to prevent an implosion; and put forward a detailed, public plan to achieve full integration within six... MORE

The Political is Personal

Politics and Economics
Arnold Kling
Dan Balz writes, a report issued Monday by the Pew Research Center paints a particularly stark portrait of a nation in which the most significant divisions are no longer based on race, class or sex but on political identity. Read... MORE

James W. Ceaser on the Constitution

Institutional Economics
Arnold Kling
He writes, Legalistic constitutionalism refers to formulas and rules. It makes one think immediately of lawyers and judges spinning elaborate constitutional doctrines and devising multi-pronged "tests." Like ancient Egyptian priests, these legal experts speak an occult jargon that few citizens... MORE

Two Improper Concepts to Measure

Economic Methods
Arnold Kling
1. The value of household production. Timothy Taylor writes, Get an estimate of hours devoted to home production, and then multiply by the wage that would be paid to domestic labor. No! No, no, no! Suppose I build a deck... MORE

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